Mexico to Trump: Those Carrier jobs are not the story

Mexican President Enrique Peña Nieto and Donald Trump shake hands after making a joint statement at Los Pinos, the presidential residence in Mexico City, in August. (Marco Ugarte/AP)

MEXICO CITY — For the Mexican government, few goals seem more important than winning new foreign investment. The competition among Mexican states to bring the next automobile plant or aerospace factory is intense and produces big-time incentives for foreign companies that make the move.

But the announcement that Carrier, the Indiana-based company that makes air conditioners and heaters, would be keeping some 1,000 jobs in its Indianapolis plant instead of moving them to Monterrey, Mexico, was greeted by Mexican officials with little more than a shrug.

“I see this as something that should occupy us, not worry us,” said Hector Castillo Olivares, the mayor of Santa Catarina, the Monterrey suburb where the new Carrier plant is being built.

“The United States is not the world,” the state’s governor, Jaime “El Bronco” Rodriguez, told a radio station. “We don’t depend on them, nor do we have to depend on them.”

Or as Fernando Turner Davila, the state’s economic development secretary put it: “We are confident about the future.”

While some of this might be positive government-speak to mask a painful loss of hundreds of jobs, other dynamics also are at work.

For one thing, the Carrier decision is not a disaster for the company’s Mexico operations. As Turner explained, the new plant will still open in coming months and will create jobs, although fewer than planned. The company currently employs about 3,000 people in the Monterrey area, he said, and this is going to increase to about 4,100, compared to about 5,000 anticipated before Trump arrived on the scene.

That is a better outcome than what Trump seems to have had in mind. The plant in Mexico had been a sticking point in his negotiation with Carrier officials. Since it was nearly constructed, Trump said he thought the ship had sailed and it was too late to make a deal.

President-elect Donald Trump spoke at a Carrier plant in Indiana on Dec. 1, praising his own input into their decision not to move production jobs to a Mexico plant. (The Washington Post)

Now that it’s done, he said he doesn’t care what happens to that plant.

“Rent it, sell it, knock it down, I don’t care,” he said.

Monterrey and other cities in northern Mexico’s manufacturing belt are a success story for the country. They have recovered from some brutal drug-war years and are now home to a robust network of plants making cars, electronics, steel and other products.

But the United States isn’t really key to that success. In the state of Nuevo Leon, where Monterrey is the capital, 92 percent of the total investment is domestic. Of the 8 percent that comes from abroad, the United States accounts for 40 percent, a contribution that has been declining over the years as companies from Europe and Asia bring more jobs to the state, Turner said.

South Korea is now one of the most important; it has opened a Kia car plant in Monterrey and brought in other parts suppliers.

“You can’t forget that we are already a globalized world,” said Castillo, the mayor. “I have received visitors from countries in Europe and Asia who are interested in investing here: Korea, Great Britain, they are interested in manufacturing and also in the automobile industry.”

Mexican officials don’t see Carrier’s decision as the first of a series of dominoes that will fall. The Carrier issue came up in the middle of the campaign, in a Rust Belt state of which Vice President-elect Mike Pence is governor. The closure of a plant also attracts more political opposition than a company just opening a new plant in Mexico, Turner said.

“We don’t think it’s a sign [of things to come], I think it’s something extraordinary,” Turner said. “Globalization is not going to end with Mr. Trump. The United States cannot and will not isolate. It is not possible.”

Trump’s electoral victory has already caused some tangible damage to Mexico. The value of the Mexican peso has plummeted, and it fell further Thursday on the news that the widely respected Central Bank governor, Agustin Carstens, would be moving in the summer to a new job as the general manager of the Switzerland-based Bank for International Settlements.

But for now, cautious optimism seems to be one thing Mexico still has in abundance to export.